Ndubuisi Ekekwe is a founder of the non-profit African Institution of Technology. He recently edited Nanotechnology and Microelectronics: Global Diffusion, Economics, and Policy.

Africa Is Open for Business9:24 AM Monday February 6, 2012 by Ndubuisi Ekekwe | Comments (2)

Angola is offering financial aid to debt-ridden Portugal. The Economist recently declared Africa a "hopeful continent" after years of writing it off as "hopeless." More than a million Chinese are in Africa exploring opportunities in villages and cities. The continent is attracting top global brands and has a growing middle class. There's a sense of upbeat optimism with possibilities that seem endless. As the lions roar from Kenya to Ghana, and cheetahs from South Africa to Mali, young Africans are unleashing their entrepreneurial energy and most governments are offering stronger leadership, a more business-friendly economy, and less corruption.

But, Africa is not an isolated island in the world, and ongoing uncertainty with some of its trading partners could imperil any sustainable progress. A trade shock is just around the corner, as the continent remains reliant on a mineral-based economy. And new, rosy economic statistics have not managed to stop strikes, riots, and other protests, which are the result of the continued reality of economic inequality. What's more, Africa is complex, fragmented and multicultural. What works in Nigeria is not guaranteed to work in Kenya.

But, none of this should keep businesses from expanding into African markets. The international community should not ignore a growing market of roughly a billion people. Africa needs about $50 billion to meet its development goals over the next few years, and it needs the help of the international community to tackle the vicious cycle of poverty, disease and hunger in Africa today.

African economies are growing, and millions have moved into the middle class category within the last decade. And Africans are buying things, from iPads to Porsches. Africans are also becoming global players, with some of their banks — such as United Bank for Africa and Guaranty Trust Bank — opening offices in the U.S., France Flag Like ReplyReply Real-time updating is paused. (Resume)Add New CommentPost as … .Africa Is Open for BusinessAngola is offering financial aid to debt-ridden Portugal. The Economist recently declared Africa a "hopeful continent" after years of writing it off as "hopeless." More than a million Chinese are in Africa exploring opportunities in villages and cities. The continent is attracting top global brands and has a growing middle class. There's a sense of upbeat optimism with possibilities that seem endless. As the lions roar from Kenya to Ghana, and cheetahs from South Africa to Mali, young Africans are unleashing their entrepreneurial energy and most governments are offering stronger leadership, a more business-friendly economy, and less corruption. But, Africa is not an isolated island in the world, and ongoing uncertainty with some of its trading partners could imperil any sustainable progress. A trade shock is just around the corner, as the continent remains reliant on a mineral-based economy. And new, rosy economic statistics have not managed to stop strikes, riots, and other protests, which are the result of the continued reality of economic inequality. What's more, Africa is complex, fragmented and multicultural. What works in Nigeria is not guaranteed to work in Kenya. But, none of this should keep businesses from expanding into African markets. The international community should not ignore a growing market of roughly a billion people. Africa needs about $50 billion to meet its development goals over the next few years, and it needs the help of the international community to tackle the vicious cycle of poverty, disease and hunger in Africa today. African economies are growing, and millions have moved into the middle class category within the last decade. And Africans are buying things, from iPads to Porsches. Africans are also becoming global players, with some of their banks — such as United Bank for Africa and Guaranty Trust Bank — opening offices in the U.S., France and the U.K. Investments in the continent will grow, and the following areas remain the most promising:Energy: Despite the abundance of resources like solar, oil, water and gas, most Africans still have no reliable energy supply. The challenge has been the cost-intensive, long-term reward nature of these projects in unpredictable political systems. It's simply too risky for businesses to invest in this sector. Minerals: As the world economy recovers, African minerals such as crude oil and gold will remain important to the global economy, as demand increases. Investing in extracting and processing these minerals will remain a lucrative venture. Agriculture: Africa is unfed in a continent with good, arable land. Africa imports its food, despite the fact that it produces enough to feed its citizens. The problem is that harvests are poorly managed due to a lack of preservation techniques, which means that much of the food goes to waste and Africa goes hungry even after bumper harvests. Food production, processing, and preservation will remain a profitable growth area. Technology: Africa has not attracted capacity-building investments, such as R&D centers and hi-tech manufacturing. In the coming years, as global buyers become more sophisticated, companies that differentiate their products within local markets will have a strong competitive advantage. Africa is no exception. For example, telecoms can be profitable in Africa not for selling airtime, but for powering value-added services such as mobile banking and mobile business, among others, that address the needs of this unique population. Four things will drive the African economy in this decade:African diasporas: The diasporas who have acquired world-class skills with international networks will drive sustainable African development. As the global economy recovers from recession, their impact will continue to expand. Education: Education is a weak link in the development of the continent. Major foreign investment has not come to the sector owing to low return, but some African governments are working hard to change that. For instance, Rwanda and Carnegie Mellon University have teamed up to offer a graduate-level program in East Africa. The new campus will train talent for companies who want to make products closer to Africans. Better education will also serve to advance the entrepreneurial ecosystem on the continent. Intra-trade: The trade route to colonial links will become weaker as these nations become richer and make choices purely based on market factors. For instance, Cameroon could choose South Africa, rather than France, to process some of its food. Infrastructure: Though the regional economic communities (RECs) have not lead to monetary unions, Africa is poised to benefit from the integration of its various economies, and can learn from the euro zone crisis when strategizing about its own single currency program (PDF). The RECs will form free trade areas, which will help modernize infrastructure, among other things. Africa's biggest risk is its political system. New governments have cancelled mine contracts and leases executed by predecessors. The continent faces challenges if it cannot prepare for its post-mineral era. As I drive by dead mines that generated billions of dollars of wealth around the world, but left no sustainable community development behind, I have to wonder: What will the domino effect be if the continent cannot transmute effectively into a post-mineral era? Africa needs a redesign of its economy towards a knowledge-driven one. New industries remain underfunded and quality startups are scarce.Africa is open for business, and tomorrow's global leaders should understand both the risks and the opportunities that are available here. There is the potential for corporations to make billions of dollars in profits in Africa. But, much more importantly, contributing to a strong and sustainable Africa could just be the next generation of global leaders' greatest legacy.

Yahoo! News As Africa welcomes more Chinese factories, a new wariness sets in

In Congo, Chinese are settling in with businesses and bargains that locals love. But at a giant copper smelting plant, Chinese and locals work together but live apart.

Christian Science Monitor Jacob Kushner 2 hours ago

Some 6,000 miles away from his home in China, Robin Wei awakes on a cot beneath a white mosquito net. He gets dressed, opens the door of his bunker, and walks out into the rainy season toward the factory where he works.

Four years ago, Mr. Wei bade goodbye to his wife and daughter in Shanghai and boarded a flight to the heart of Congo's mineral belt. He lives and works at a Chinese-owned smelting plant that extracts copper from the rich ore, which is then sold for wire and pipes that go into building skyscrapers and cargo ships.

Congo also holds nearly half the world's known reserves of cobalt. It has vast reserves of high-grade copper, tantalum, and tin. Just 10 years ago, a ton of copper could fetch $1,700 on the world market. Today it goes for about $8,000.

Wei is one of hundreds of thousands of Chinese men and women – as many as 1 million by some estimates – who, at least for now, call Africa home. (Wei goes home to visit his wife and daughter once a year.) China has been investing heavily in Africa for more than a decade, and both China and its migrants are in what could be called a settling-in period as the story of a fast-growing Africa and a rising China unfolds.

Congo is increasingly influenced by the penetration of all things Chinese, and that in turn is bringing high hopes for development.

But it is also raising wariness here that Africa's new benefactor may sometimes be driven by the same self-interested motives as the Western nations that preceded it in the colonial and postcolonial periods.

Like most Chinese here, Wei lives a separate life, socializing exclusively with his Chinese co-workers except for an occasional foray down the street to buy groceries and exchange pleasantries with a Congolese street vendor.

Yet to the Congolese, the Chinese have increasingly become a necessary part of everyday life. To buy a cellphone, people go to Chinese electronics shops that offer knock-off Blackberry models at a third of the market price. When people want to enjoy a soccer game, they take a seat in the bleachers at Kinshasa's "Martyrs Stadium," a gift from China in 1993. A drive through downtown Kinshasa runs along a grand central boulevard, newly widened and repaved by a Chinese construction company.

Down the road from Wei's copper-smelting plant in the town of Lubumbashi, a Chinese doctor treats Congolese and Chinese patients with a combination of modern pharmaceuticals and ancient Chinese acupuncture. Grocery stores sell Chinese rice and sauces; there is even a Chinese casino.

Many Africans have welcomed Chinese migrants and their businesses. In a 2009 survey of 250 people in nine African countries, three-quarters said the Chinese way was a "very positive" or "somewhat positive" model of development.

Increasingly that Chinese model is defined by huge deals in which Chinese companies mine minerals or extract oil and build needed infrastructure for the African nation, often using Chinese skilled labor to do so.

The rising price of copper, for example, has prompted two Chinese state-owned companies to open the largest mine Congo has ever seen. In exchange for the rights to mine potentially billions of dollars' worth of copper for more than two decades, these companies are spending $3 billion upfront to build roads, bridges, and hospitals in Congo.

The Chinese are replicating this minerals-for-infrastructure model in other African countries, notably Zimbabwe, Guinea, and Angola. In 2009, China surpassed the United States as Africa's largest trading partner.

That China has moved 600 million people out of poverty over the past 35 years is a source of admiration for some African elites.

When asked in a different survey which model of development offers more promise for Africa's future – the Western one, which tends to keep private business separate from infrastructure that is considered "aid," or the Chinese model, which blends the two – Africans responded overwhelmingly with the latter. Many see China as more welcoming than the US. Twice a week, a line forms outside the Chinese Embassy in Kinshasa as Congolese students and businessmen arrive to apply for visas to work or study in China. They say it's far easier to get a visa to go there than to the US.

As relations deepen, however, a wider rift is opening between Chinese and Congolese at the workplace. Congo's leaders laud Chinese investors for creating jobs. But some here note that large Chinese companies often employ Chinese workers to do jobs that could easily be done by Congolese. Even Congolese who do get hired by Chinese companies may find their high expectations dashed.

On a rainy morning in Kinshasa, a group of Congolese men huddle under the overhang of a tin roof. The men are employed by the China Railway Engineering Corp. (CREC), a large construction company that is widening and paving the road that connects Kinshasa's airport to its downtown.

The men have been hired to dig trenches, direct traffic, and carry supplies, for which they earn $65 per month, just slightly above the minimum wage here.

The workers say they hardly interact at all with their Chinese managers. They eat and live separately from them. And they say most Chinese don't learn the local languages, French and Lingala, making conversation impossible. The men dress in street clothes because CREC doesn't provide them with uniforms.

"They don't give us boots or helmets. We work like this," says Maba Litile, pointing to the sandals he's wearing. "We work really hard, but the money is too little. If I found another job, I'd leave."

Far away on the outskirts of a mining town called Kolwezi, men, women, and often children spend their days digging with picks and shovels for bits of copper ore. Each week they push bicycles and wheelbarrows laden with bags of those rocks to sell to the Chinese.

In a riverbed that runs through town, Kayenda washes and cleans a batch of rocks before selling them. Like most Kolwezi miners, Kayenda says she's grateful to the Chinese for providing a means by which her family can earn an income. But also like many, she resents that the Chinese are getting rich off her hard work and her nation's minerals. "The way they are helping is giving jobs, but also they are stealing from us," she says.

Some see China as merely the newest player in a centuries-old pattern of foreign powers coming to make their fortunes from Congo's natural resources.

In theory, Congo should be rich, given its vast mineral wealth. But one wouldn't know it by looking at how the majority of Congo's 76 million people live. Rural families sleep in huts that flood when it rains. Only 4 percent have electricity.

Life in cities can also be bleak, as urbanites hustle to earn enough income to subsist. Despite its resources, Congo is the least developed country in the world, and it is also the world's most unlikely place for an individual to improve his or her livelihood, according to the United Nations.

It is hardly lost on Congolese that billions of Western aid and investment dollars have not alleviated Congo's poverty. Some say the West has had its chance. Yet the question of whether China will improve life in Congo more than did the investors who came before it remains unanswered.

On a rainy morning back at the copper-smelting factory where Wei works, a group of muscular Congolese men swing sledgehammers over their heads, then bring them crashing down upon black boulders. More men enter the machinery yard through a metal gate.

"Congolese, they really don't have a sense of time and distance. They're supposed to work at 7:30 but they come at 8 or 8:10 or 8:20," says Wei, who seems more intrigued than concerned.

Behind them, the three-story furnace melts the ore into copper lava, sending dust particles into the air. After an hour of watching rocks transform into molten copper, it becomes impossible to take a full breath without a burning sensation in the lungs. Yet only the few Congolese workers who handle the molten copper are given protective face masks.

All week, Wei and his Chinese colleagues work side by side with the Congolese men. As is typical for first-generation Chinese abroad, they eat only Chinese food while their Congolese employees place a pot atop the hot copper at the factory to cook cassava flour – a traditional East African lunch.

But on the weekends, Chinese workers struggle to feel at home in a place that remains largely foreign to them. Wei is one of only a few who speak the local languages. Some of Wei's Chinese co-workers say they have come seeking adventure. They are often new college graduates who face scarce job prospects at home, or they are leaving jobs in China to earn more money in Africa.

But in reality, Wei's co-workers tend to stay isolated from Congolese society altogether, rarely venturing beyond the concrete walls of the smelting complex. They spend their weekends tending gardens planted with Chinese vegetables, playing table tennis, and singing karaoke. Many are simply reconstructing their lives in China, here.

For many, China's influence in Congo will depend upon whether the Chinese stick around.

Some Chinese have lived here for more than a decade and intend to stay. But the business that brings so many Chinese migrants to Congo today could one day lure them away again as opportunities arise in other places. Whether the Chinese will be transient or put down roots here in Congo remains to be seen.

•This story was adapted from the new e-book "China's Congo Plan." Reporting was supported by the Pulitzer Center on Crisis Reporting and the Columbia University Graduate School of Journalism.

James Mwangi grew up on the slopes of the Aberdare Mountains in central Kenya. His father lost his life during the Mau Mau uprising against the colonial authorities. His mother raised seven children, making sure both the girls and the boys were well educated. Everybody in the family worked at a series of street businesses to pay the bills.

He made it to the University of Nairobi and became an accountant. The big Western banks were getting out of retail banking, figuring there was no money to be made catering to the poor. But, in 1993, Mwangi helped lead a small mutual aid organization, called Equity Building Society, into the vacuum.

The enterprise that became Equity Bank would give poor Kenyans access to bank accounts. Mwangi would cater to street vendors and small-scale farmers. At the time, according to a profile by Anver Versi in African Business Magazine, the firm had 27 employees and was losing about $58,000 a year.

Mwangi told the staff to emphasize customer care. He switched the firm’s emphasis from mortgage loans to small, targeted loans.

Kenyans got richer, the middle class boomed and Equity Bank surged. By 2011, Equity had 450 branches and a customer base of 8 million — nearly half of all bank accounts in the country. From 2000 to 2012, Equity’s pretax profit grew at an annual rate of 65 percent. In 2012, Mwangi was named the Ernst & Young World Entrepreneur of the Year.

Mwangi’s story is a rags-to-riches Horatio Alger tale. Mwangi has also become a celebrated representative of the new African entrepreneurial class, who now define the continent as much as famine, malaria and the old scourges.

But Mwangi’s story is something else. It’s a salvo in an ideological war. With Equity, Mwangi demonstrated that democratic capitalism really can serve the masses. Decentralized, bottom-up capitalism can be the basis of widespread growth, even in emerging markets.

That theory is under threat. Over the past few months, we’ve seen the beginning of a global battle of regimes, an intellectual contest between centralized authoritarian capitalism and decentralized liberal democratic capitalism.

On July 26, for example, Prime Minister Viktor Orban of Hungary gave a morbidly fascinating speech in which he argued that liberal capitalism’s day is done. The 2008 financial crisis revealed that decentralized liberal democracy leads to inequality, oligarchy, corruption and moral decline. When individuals are given maximum freedom, the strong end up stepping on the weak.

The future, he continued, belongs to illiberal regimes like China’s and Singapore’s — autocratic systems that put the interests of the community ahead of individual freedom; regimes that are organized for broad growth, not inequality.

Orban’s speech comes at a time when democracy is suffering a crisis of morale. Only 31 percent of Americans are “very satisfied” with their country’s direction, according to a 2013 Pew survey. Autocratic regimes — which feature populist economics, traditional social values, concentrated authority and hyped-up nationalism — are feeling confident and on the rise. Eighty-five percent of Chinese are very satisfied with their country’s course, according to the Pew survey.Continue reading the main story Continue reading the main story

It comes at a time when the battle of the regimes is playing out with special force in Africa. After the end of the Cold War, the number of African democracies shot upward. But many of those countries are now struggling politically (South Africa) or economically (Ghana). Meanwhile, authoritarian Rwanda is famously well managed.

China’s aggressive role in Africa is helping to support authoritarian tendencies across the continent, at least among the governing elites. Total Chinese trade with Africa has increased twentyfold since 2001. When Uganda was looking to hire a firm for an $8 billion rail expansion, only Chinese firms were invited to apply. Under Jacob Zuma, South Africa is trying to copy some Chinese features.

As Howard French, the author of “China’s Second Continent,” points out, China gives African authoritarians an investor who doesn’t ask too many questions. The centralized model represses unhappy minority groups. It gives local elites the illusion that if they concentrate power in their own hands they’ll be able to move decisively to lift their whole nation. (Every dictator thinks he’s Lee Kuan Yew.)

French notes that popular support for representative democracy runs deep in most African countries. But there have to be successful examples of capitalism for the masses. There have to be more Mwangis, a new style of emerging market hero, to renew faith in the system that makes such people possible.

President Obama is holding a summit meeting of African leaders in Washington this week. But U.S. influence on the continent is now pathetically small compared with the Chinese and Europeans. The joke among the attendees is that China invests money; America holds receptions.

But what happens in Africa will have global consequences in the battle of regimes. If African nations succumb to the delusion of autocracy, we’ll have Putins to deal with for decades to come.